A complete guide to finding the right bank

Banking is a vital part of personal finance—and for many of us, our bank accounts are the main financial tool we use weekly or even daily. Finding the right bank can save you headaches—and money.

It may seem like all banks are the same—and on a basic level, most do offer similar services.

But when you look closer, you’ll notice that each bank has its own unique pros and cons. Banks offer different services, fee structures, interest rates, and more. 

In this guide, we’ll go over everything you need to know about finding the right bank for your needs.

Finding a bank: Questions to consider 

There are hundreds of different banks, from big national banks to small regional credit unions—plus a variety of online-only banks. 

To choose, you’ll want to ask yourself some important questions. Is access to physical branches important to you? Are you looking for any specific features or perks? 

Before you shop around for a specific bank, sit down and ask yourself the following questions. 

What account type do I need? 

What type of bank account—or accounts—do you need? 

You may just be after a simple checking account or a checking + savings combo. 

Or maybe you want a specialty account, like a money market account or even a retirement account. 

Or maybe you also want to open a credit card along with your standard bank account. 

Some banks offer lots of account types, while others are more simplistic. If you’re hoping to keep most of your accounts at the same institution, finding a bank with several options may be helpful.

At the same time, using multiple financial institutions is simple enough these days. You might have your primary checking account at a local credit union, a high-yield savings account at an online bank, and a retirement account at a stock brokerage. 

Do I need a loan, credit card, or mortgage?

In addition to considering what type of bank account you need, it’s also important to consider the type of loan products you might want or need. 

Most banks offer loans, credit cards, mortgages, etc.; however, their interest rates vary significantly. 

If you plan to apply for any sort of loan or credit card in the near future, it’s important to consider the impact of interest rates. Even a small difference in APR (annual percentage rate—the yearly interest cost you’ll pay on what you’ve borrowed) can make a huge difference over the life of a loan. 

Again, it’s not essential that you keep all your accounts and loans at the same bank—but it could simplify your life a bit. 

Do I need access to a physical branch?

One of the most significant debates is whether or not you want access to a physical bank branch. This will determine if you should look for a traditional bank or credit union or if an online banks would be a good fit for you. 

Physical bank branches certainly have benefits. They’re helpful for large cash transactions, and sometimes it’s easier to talk money matters with a real human, face-to-face. 

But these days, physical banking is less and less necessary. With online banking, you can conduct most of your transactions from your computer or smartphone and use an ATM for cash transactions. 

Even things like depositing physical checks can be done via a mobile app with most banks. 

For physical cash, withdrawing is easy from ATMs—though you may be charged a fee if you can’t find an in-network ATM. Depositing physical cash can be done at many ATMs, but not all. 

If you frequently use cash, it may be wise to consider a bank with physical branches. If not, physical banking isn’t necessary to prioritize. 

Do I need any particular features or services? 

Your bank probably offers other stuff beyond your checking and savings account. They issue loans (car loans, mortgages, small business loans, etc.), rent safe deposit boxes, and much more. Some even offer advisory services, like financial advising.

It’s also wise to think ahead. Perhaps you just need a bank account now, but you plan to get a car loan in the next few years. Do the banks you’re considering offer auto loans?

Again, it’s not an absolute necessity to keep all your financial activities under one roof. But for many people, it’s helpful to keep things simple by keeping all of their finances in one place.

Do I qualify for any specialty banking products? 

Finding a good bank for you may also involve checking to see if you’re eligible for any exclusive bank accounts. 

Most bank accounts are available to everyone. These accounts provide the basics and are available from most traditional banks, credit unions, and online banks. 

Then there are a variety of specialty bank accounts that are only available to certain groups of people. These accounts tend to offer better perks, like lower fees or higher interest rates on savings—but they’re not available to everyone. 

For example, student bank accounts are offered to college students, teen bank accounts are offered to teens, and veteran’s accounts are offered to military veterans and their families. 

For students, Mos is worth checking out. Mos offers student-first banking, including a fee-free debit card and banking solution with generous perks specifically for students. Mos offers cash back rewards, help finding scholarships and grants, assistance finding side-gigs, and much more. 

The Veterans Benefits Banking Program (VBBP) offers generous perks for veterans. Many banks and credit unions participate in the VBBP.

If you qualify for one of these accounts or programs, it’s well worth considering. The exclusive perks and benefits offered are often superior to what’s available with standard bank accounts. 

Types of banks compared 

Did you know that there are over 4,200 banks in the US and over 72,000 physical branches? That’s a whole lot of banks to choose from! 

There are several broad categories of banks, from small credit unions to big national banks. The section below will highlight some of the key differences between the different categories. 

National banks 

National banks are the big banking institutions that are likely household names. 

These companies are massive and often have hundreds, if not thousands, of physical bank branches.

The main benefit of these banks is that they have so many branches. Even if you are traveling out of state, you will likely still have access to physical bank branches. Plus, they offer access to a massive network of ATM machines, so it’s easy enough to find a fee-free ATM. 

Another perk is that these banks offer a wide variety of services. The big banks tend to offer everything from standard banking to loans to investment management. 

The downside is that these banks often have higher fees. Many have monthly service fees just to have a bank account open and may also have higher fees for things like overdrafts (when you accidentally withdraw or spend more money than you have). 

Regional banks 

Regional banks are large banks that operate in a specific geographic region. For instance, a bank may operate on the West Coast or in the Midwest. 

These banks share many of the same characteristics as the bigger national banks. They tend to offer a wide variety of services and have many branches (within their regional area). 

Community banks

Community banks are smaller bank chains that operate in local communities. This usually means a specific town, county, or multi-county region. Community banks typically only have branches in one state and usually only operate in a certain region. 

Because these are smaller banks, there may be some services—such as financial advisory or investment management—that aren’t available. With that said, they tend to do more to attract customers—which may mean lower fees or higher interest rates on savings accounts. 

Community banks have their own ATMs but may not have access to a big network of fee-free ATMs outside of their operating area. 

Online banks 

Online banks are banks that operate solely online. They do not have physical bank branches where you can access banking services. 

Online banks can offer perks for those who don’t mind not having access to physical branches. 

For one, running an online bank costs much less than running a physical bank. These online banks don’t have to pay for rent, utilities, or salaries for tellers. 

In many cases, online banks pass some of these savings onto their customers. This could come in the form of a lower interest rate on loans, lower fees on bank accounts, or higher interest rates paid on your savings. 

For example, many online banks offer high-yield savings accounts. These accounts function similarly to standard savings accounts but pay much higher interest rates. 

Some online banks specialize in a specific area of personal finance, while others offer a broad selection of services. 

The main downside is that there are no physical bank branches. However, online banks usually partner with other financial institutions to offer fee-free access at select ATMs. 

If you’re someone who values in-person banking, online banks likely aren’t for you. But online institutions are worth checking out if you want the best deal possible on your banking services. 

Credit unions 

Credit unions are member-owned financial institutions. They function similarly to banks in that they offer many of the same services—deposit accounts, loans, credit cards, etc. 

However, they are nonprofit organizations rather than for-profit companies. The goal of a credit union is to benefit its members—not to make a profit.

Credit unions are owned by their members. When you open an account at a credit union, you technically now own a small slice of the entire credit union. Cool! 

Because credit unions are not set up to make a profit, they are often much more affordable than standard banks. 

Credit unions typically offer lower interest rates on loans and credit cards, lower fees on banking services, and potentially higher interest rates paid on savings accounts. 

Credit unions are typically local or regional chains, but some also operate as online banks. If you have a credit union in your area, it’s well worth looking into. 

Specialty financial institutions

Specialty financial institutions are non-bank companies that offer financial services. Examples include stock brokers, non-bank lenders, and companies like Mos.

These companies are not banks, but they may offer similar services. For instance, a non-bank lender may offer mortgage loans. Or a non-bank financial institution may offer investment products involving real estate, cryptocurrency, or other alternative asset classes. 

Typically, these companies are set up to offer a specific type of service, often in a unique way that standard banks do not offer. In some cases, the company may partner with actual banks to offer select services. 

Take Mos, for example. Mos is not a bank, but we’re partnered with Blue Ridge Bank. Mos offers the technology that powers the Mos app, debit card, and juicy perks for students—but Blue Ridge Bank offers the behind-the-scenes banking functionality. 

Mos is able to offer awesome perks that standard banks don’t offer. Mos is built for students and offers perks like help finding scholarships, cash back rewards, and much more. 

How to find a bank 

Whew, that’s a lot of information! To sum up, how should you go about finding a bank? 

Here’s the breakdown.

First, consider the features and account types you need. This will help you narrow down your selection of banks to choose from. 

Then, consider whether you might qualify for a specialty account. Are you a student or a veteran? Are you over age 65? If so, you may qualify for an account with special perks. 

Next, determine whether or not you want access to physical bank branches. If you do, this will eliminate online banks from consideration. 

Then, consider for a moment your future needs. Does the bank provide what you need now and what you might need over the next several years? For instance, do they offer mortgage loans? 

Finally, start narrowing down your options to find the right fit for you. Once you’ve narrowed it down to 2-3 options, you can closely compare them side by side. You can also check online reviews to see what other people think about each bank. 

Don’t forget to consider fees!

Before making your final decision, it’s important to carefully consider the impact of fees. 

All banks have fees for some things, like overdrafting your account. However, other types of fees, like account maintenance fees, are avoidable. 

Many large banks charge monthly maintenance fees just to have an account open. For instance, a bank may charge $5 per month for a savings account. 

While $5 per month might not seem like much, it’s quite likely that this fee will more than outweigh the interest you earn on the savings account. And over time, these small fees can really add up! 

Remember, when you deposit money with a bank, you’re doing them a favor! After all, they can then use your money to issue a loan, which helps them make a profit. You shouldn’t need to pay a monthly fee for banking services! 

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Wrapping up

Finding a new bank is all about closely considering what you need in a bank and then actively looking for a bank that fits your needs. It’s best to find a bank with no monthly fee that offers all the services and features that you want. 

If you’re a student, check out the Mos debit card. Mos is designed specifically for college students and offers a fee-free banking solution with cash back rewards, access to scholarships, and much more.